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If you're on the hunt for outstanding healthcare dividend stocks, Allergan, Bristol-Myers Squibb, and McKesson need to be on your radar.

Healthcare stocks have been extremely fertile ground for dividend investors over the last few years -- thanks, in large part, to the aging global population that's presently driving a surge in demand for medical products and healthcare services. Best of all, this rising tide is showing no signs of slowing down.

Based on this insight, we turned to three of our Motley Fool investors to get their take on which healthcare stocks might be outstanding buys for their dividends. They recommended Allergan(NYSE:AGN), Bristol-Myers Squibb(NYSE:BMY), and McKesson(NYSE:MCK). Read on the find out why.

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Buy the dip

George Budwell (Allergan): Allergan's shares have drastically underperformed the broader markets this year due to both its hefty stake in the generic drugmaker Teva Pharmaceutical Industries Ltd.(NYSE:TEVA), as well as its battle to stave off generic competition for its dry eye medication, Restasis. At 11.5 times 2018 projected earnings, though, this dividend healthcare stock is arguably an outright bargain at this point.

Now, the pink elephant in the room is Allergan's real-world ability to defend Restasis against generic knock-offs, and that effort just took a huge hit after a federal judge ruled that the drug's remaining patents are invalid. However, even in a worst-case scenario, where Allergan is unable to win an appeal, the company still has numerous value drivers in the works that should help to propel its shares higher in the coming years. The drugmaker's late-stage pipeline, after all, has several potential blockbusters currently under development -- such as its promising non-alcoholic steatohepatitis candidate, cenicriviroc, that could rake in several billion in sales if approved.

Additionally, Allergan has been working diligently to improve its capital structure by lowering its tremendous debt load. Over the next year, for instance, the company expects to reduce its debt by a healthy $3.8 billion. And if this line holds, Allergan should end up sporting a fairly reasonable debt-to-equity ratio of 35% -- a figure that would be among the lowest within its immediate peer group.

This debt reduction projection also comes on top of Allergan's recent commitment to buy back an additional $2 billion in shares and raise its rather modest dividend (with a current yield of 1.36%) in 2018.

Coming full circle, Allergan certainly has its risks thanks to the Restasis patent litigation and its ties to Teva. But the company's robust clinical pipeline and improving balance sheet should see it through to better days.

A focus on specialty drugs makes for a healthy dividend

Sean Williams(Bristol-Myers Squibb): Of the 10 major sectors, solid dividend stocks can be among the toughest to find in healthcare. Though healthcare offers inelasticity (i.e., people can't control when they get sick or what ailment they contract), a lot of cash flow has to be reinvested into new drugs and devices as a result of finite periods of branded product patent protection. This often leaves very little left over for a dividend payment. Nonetheless, Big Pharma Bristol-Myers Squibb has the looks of a dividend stock worth considering.

The reason Bristol-Myers looks so attractive is because it's generating a lot of its growth from specialty indications that are likely to command top-dollar list prices.

For example, its cancer immunotherapy Opdivo -- cancer immunotherapies work to suppress the ability of cancer cells to "hide" from the immune system -- currently sits at the front of the pack in terms of aggregate sales among immunotherapies. It's a foundational therapy for second-line non-small cell lung cancer and second-line renal cell carcinoma, and it's being tested as both a monotherapy and combo therapy in dozens of additional studies. At its current growth trajectory, Opdivo has a shot at delivering $5 billion in full-year sales in 2017, and perhaps up to $10 billion annually, in my opinion, at its peak.

Bristol-Myers Squibb has also had abundant success with leading oral anticoagulant Eliquis, which was co-developed with Pfizer(NYSE:PFE). Organic prescription growth, along with the possibility of label expansion opportunities, could see Eliquis reach north of $5 billion in sales for Bristol-Myers one day. Sales were up 51% to $2.28 billion through June so far this fiscal year.

This specialty drug focus, along with demand inelasticity, makes Bristol-Myers' 2.4% yield all the more sustainable.

A (legal) drug dealer

Brian Feroldi (McKesson): Ever wonder how your local pharmacy refills its shelves? The odds are good that the answer to that question is a drug wholesaler called McKesson. With total sales of nearly $200 billion, McKesson is one of the largest drug wholesalers in the world.

While that's an insane amount of revenue, drug wholesaling isn't exactly a high-margin businesses. In fact, McKesson's profit margin usually hovers around 1%. Still, McKesson has so much scale that it can crank out billions in profits in spite of the razor-thin margins. What's more, the use of prescription drugs should continue to rise over time as the baby boomer generation ages. The increased demand should translate into financial success for McKesson.

So, what is McKesson going to do with its growing profit stream? The likely answer is to return capital to investors. McKesson boasts a long history of using its financial might to buy back copious amounts of stock and pay out a rising dividend.

While McKesson's current yield of 0.9% might not get your heart racing, the company's payout ratio is a paltry 5%. That figure suggests that shareholders can expect dividend bumps for years to come. If true, then I think this is a great dividend stock for healthcare investors to get to know.

Author

George Budwell has been writing about healthcare and biotechnology companies at the Motley Fool since 2013. His primary interests are novel small molecule drugs, next generation vaccines, and cell therapies.